Jeff Bezos’ $2 billion investment to establish a Montessori-inspired network of preschools may be shrugged off by many as the world’s richest man dabbling in another playground. Instead, we should see it for what it is: the early days of Amazon’s foray into public education.
Bezos, more than any other tech entrepreneur, is known to play the long game, masterfully. In a now-famous 1997 interview, he candidly explained why Amazon started out by selling books. (Hint: It had nothing to do with Bezos’ love for literature. Books were simply a stepping stone, the “best first thing” to sell.) Less than three decades later, Amazon has become not just the world’s largest online retailer, but also a global leader in areas as diverse as cloud computing, home security and digital content production. And we’ve only seen the beginning—within the next few years, the company is poised to disrupt the healthcare market, become the market leader in online advertising, establish itself as a competitor to USPS, FedX and UPS, and provide global access to broadband internet through a network of satellites orbiting the planet… to name but a few examples.
I do not think public education leaders will have much of a choice in whether or not to answer when Amazon comes to knock and deliver.
It would be easy to think that Amazon’s rapid expansion into industry after industry is just the natural, opportunistic path of a cash-flush company seeking to invest in new, lucrative markets. But Jeff Bezos, himself a graduate of a Montessori preschool, doesn’t think in short-term opportunities. His early annual shareholder letters bear titles such as “It‘s All About the Long Term” (1997), “Building for the Long Term” (1999) and “Taking the Long View” (2000), and they are testimony to the fact that every strategic decision he makes is part of a larger, long-term plan.
In a business world that is driven by quarterly results and short-term thinking, some of Bezos’ investments—his takeover of the Washington Post, his development of a $42 million clock meant to operate for 10,000 years, or his spaceflight company Blue Origin, set to take the first woman to the moon—may not seem driven by a larger strategic purpose. But they are. And so is Bezos’ $2 billion investment in Montessori-inspired preschools.
Amazon Has Everything to Win in Public Education
Becoming a driving force in public education may, at first, seem like a long shot for Amazon. While Google, Microsoft and Apple have been pursuing their ambitions in K-12 and higher education for more than a decade, Amazon has mostly remained at the sidelines.
But foraying into the complex sphere that is public education is a matter of when, not if, for Jeff Bezos. To understand why, it is worthwhile to consider three principles that have guided Amazon’s strategic investment and growth decisions since its founding days.
1. Anticipate long-term change in consumer behavior.
In 1994, hardly anyone was buying books on the internet. With relative ease, Amazon was able to establish itself as the “world’s largest bookstore”, allowing customers to purchase virtually any book on the market without ever leaving their home. And since the company was not operating physical stores, it was exempt from collecting sales tax which allowed Amazon to systematically undercut brick-and-mortar bookstores’ prices.
Before the 2020 pandemic, relatively few students attended hybrid, or fully virtual, schools. Like bookstores, schools were, and to a large degree still are, understood to be buildings—physical spaces where learning and social interaction takes place. And while the number of students enrolled in virtual high schools (mostly run by for-profit corporations) has increased exponentially, most of us expect the vast majority of students to happily return to in-person learning after the pandemic ends.
Yet, the world has had its first taste of the disentanglement of schooling from school buildings. Even though in 20 years we will still have school buildings—much like we still have bookstores—there is little doubt that the future will see more, not less, online instruction and content delivery.
If you have doubts, consider a brief thought experiment. It’s 2035, and you are a parent of a high school student. You are given the choice between sending your child to the crumbling building of an underfunded public high school where she has limited options of AP, math and foreign language classes to choose from, all delivered to a group of 20-30 students at a time, strictly according to schedule, five days per week.
Alternatively, your child could spend anywhere between one to six days per week at your local Amazon Learning Center—possibly branded to match the local public school district’s name and colors—where they get to choose from hundreds, no, thousands of courses to build a personalized schedule. Courses are taught—remotely and often asynchronously—by highly-paid master teachers who leverage adaptive learning technologies that build an individualized learning path for your child. These learning centers look less like classrooms and more like co-working spaces, with lounges, group meeting rooms, individual study spaces, playgrounds and makerspaces. Some local educators are in charge of social-emotional learning, counselors are available to students who seek advice, and support staff help solve any technical issue that may arise. Students who have mastered assigned content are free to volunteer, tinker, play or take part in out-of-school educational activities provided by local museums and learning providers. And if your child prefers a fully virtual setting, learning from home is normalized and supported.
Which of the two options would you choose? The one that reflects an industrialization-era widget factory, or the one that reflects the rapidly changing work environment your child will actually graduate into? There is no doubt in my mind that Jeff Bezos thinks he knows the answer, and he has a track record of being right.
2. Data is everything, and everything is data.
Anticipating shifts in consumer behavior allowed Amazon to become the first-mover in online bookselling, and subsequently enter markets like consumer electronics, fashion, and furniture. But its relentless customer centricity and obsession with data is what allowed it to dominate on all of these playing fields.
Access to vast amounts of data, the proverbial “oil of the 21st century,” and the ability to mine and analyze it, is the real competitive advantage Amazon holds over other companies. Andreas Weigend, Amazon’s former Chief Scientist, once stated, reductively, Jeff Bezos’ mantra as “if you have data, ultimately, you win.”
Public education offers Amazon access to a unique resource—the consumers, and employees, of the future, along with their user behavior, preferences and countless other data points. It’s easy to imagine why Amazon, a company famous for its powerful recommendation engines that personalize, and optimize, each user’s experience, would do anything to be able to collect years’ worth of data on a student by the time she graduated from high school and into adulthood. Future profits from owning that data would all but guarantee the return on Amazon’s investment, even if the company were to provide its educational services at a steeply discounted rate that made it hard for anyone else to compete.
And there’s more: making the brand a component of a young person’s formative learning experience would essentially turn K-12 into a loyalty program that would dwarf the success of Prime, which has possibly been the biggest customer retention success story in the history of e-commerce. It is a well-researched fact that their impressionability and influence on family spending makes children a highly attractive target group for companies seeking to build brand loyalty.
If you think it’s a stretch that Amazon, an e-commerce company, would become a public education provider just to buy the loyalties of future customers, consider that the company has made huge investments for just that reason in the past. In less than 10 years, Amazon studios has gone from nonexistent to becoming a Hollywood heavyweight, spending a whopping $7 billion on creating television series and movies in 2020 alone. “When we win a Golden Globe, it helps us sell more shoes,” Bezos said in 2016. Producing content is the means to build customer loyalty and strengthen the Prime membership program; selling shoes is the end. When you think of Amazon’s future education foray as building the world’s most effective loyalty program, does it become less far-fetched?
3. Don’t just dominate the market. Become the market.
In an influential 2018 piece called “Amazon Doesn’t Just Want to Dominate the Market—It Wants to Become the Market,” Stacy Mitchell argued it’s easy to “mistake Amazon for a retailer” and that doing so is to “profoundly misjudge the scope of what its founder and chief executive, Jeff Bezos, has set out to do.” Mitchell argues that “Bezos has designed his company for a far more radical goal than merely dominating markets; he’s built Amazon to replace them. His vision is for Amazon to become the underlying infrastructure that commerce runs on.”
Less than three decades after its inception, almost one out of every two dollars spent online in the United States flows directly through Amazon. Amazon Web Services provides the infrastructure through which much of the other dollar is spent. Through services like personal assistant Alexa or home security system Blink, Amazon has become omnipresent in our daily lives as consumers. And, as outlined earlier, Bezos has already set his eyes on markets such as healthcare, pharmaceuticals, banking, insurance and, of course, delivery and logistics. Within the next decade, Amazon is well-positioned to take over these, and other, industries.
The question then is not if, but when, education will be added to this list. My prediction is that within the next few years, Amazon will start its commercial foray in the space of adult learning, much like what Linkedin has done and Google is currently doing. At the same time, Bezos’ Montessori experiment will teach him how to operate in-person pre-schools. Existing philanthropic programs such as Amazon Future Engineer will build trust and fill the sales pipeline. With virtual learning and teaching having taken hold in a post-pandemic world, and with Amazon’s own capacities further refined and developed, fully expanding into the K-12 space will be within reach within a decade or so.
Public education is, by its very definition, political. And while Amazon has a long history of entering into public-private partnerships, the company has experienced a number of major setbacks whenever political scrutiny was too great. In 2019, facing local backlash to its plans to establish HQ2 in Long Island City, Amazon infamously pulled the plug. The company has drawn heavy criticism from civil rights groups and federal lawmakers for selling its video surveillance technology to police departments. And Donald Trump’s well-documented animosity towards Bezos may have famously cost Amazon a $10 billion cloud computing deal with the U.S. Department of Defense.
But at the end of the day, Bezos understands one thing better than anyone else: customer loyalty, even if bought at a political cost, will ultimately protect Amazon from political intervention. Antitrust cases are made against corporations that artificially increase consumer prices, not aggressively lower them. And the prize that is public education—by far the largest government expense at the state level, and arguably the crown jewel in Bezos’ masterplan to build brand loyalty—is far too attractive to pass by.
What Does This Mean for Public Education Leaders?
It has become a repetitive exercise for cities across the United States to enter into bidding wars for major corporate investments, most notoriously in the 2018 spectacle for Amazon’s second North American headquarters. There is little reason to doubt that cities would be willing to exchange 20,000 new jobs for a public-private partnership that would allow Amazon to innovate within, and ultimately run, a public school system.
Whenever it happens, this move will likely be met with outrage and protest by teachers unions and local communities. But the truth is that Amazon’s hand is too strong not to find willing partners eventually, at home or abroad. With school districts across the U.S. facing a post-pandemic death spiral due to dwindling enrollment and increased costs, Amazon may even be invited in.
But will it be a Trojan horse, or does public education stand to gain? Or both? There is no doubt that schooling has greatly benefited from the technological advances that corporate vendors such as Apple, Google, Microsoft, have been able to provide to districts. However, none of these companies have tried to run public schools. Will Amazon’s anticipated ambitions rob public education of its soul, its identity as a public institution? Will public schools cease to be a much-needed bulwark against misinformation if they fall into the hands of a profit-maximizing corporation? Will critical thought and conversation be exchanged for ever more computer-based test-taking? Will the Socratean and Humboldtian models be traded in for a purely transactional approach to education?
Or will Amazon, famous for its focus on innovation, execution and customer-centricity, help public school districts remain relevant in the 21st century? Will the company provide a desperately-needed model to remain competitive against charter schools that are increasingly embracing virtual instruction and can therefore operate from a cost advantage?
At a 2012 conference, Bezos mused: “I very frequently get the question: ‘What’s going to change in the next 10 years?’ And that is a very interesting question; it’s a very common one. I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two—because you can build a business strategy around the things that are stable in time.”
In a post-pandemic world, public education needs to take inventory, and understand its continued value proposition to our society, and the economy. To be frank: I do not think public education leaders will have much of a choice in whether or not to answer when Amazon comes to knock and deliver. But we would all be well-advised to think deeply about the stable elements in our own strategies, and just what our response will be as we open the door to Jeff Bezos.
source: Read More, EdSurge Articles